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The ICO, whose purpose is to protect information rights of UK individuals, said today that it issued the fine after an investigation into the incident, one of the largest online breaches ever. The office said the large fine reflected the seriousness of the incident and the number of users whose data was exposed, adding that the leak put their information on other websites at risk as well.

"An ICO investigation found that the attack could have been prevented if the software had been up-to-date, while technical developments also meant passwords were not secure," the ICO said.

Sony Computer Entertainment, the company's game division, said it felt the fine was undeserved.

"SCE disagrees with the ruling and is planning an appeal," said Satoshi Fukuoka, an SCE spokesman in Tokyo.

Sony continues to deal with fallout from the 2011 data breach, which exposed the personal and password information of about 77 million users, and put users' credit card information at risk. The company completely shut down its networks in the weeks after the attack, and its delayed explanation and apology to users angered many.

The company has made its network services a core of its current restructuring, completely rebuilding its networks and hiring new security advisers. Current Sony CEO Kazuo Hirai was head of SCE during the incident and resulting fallout.

The ICO also released a detailed explanation of its investigation and decision to levy fines on Sony, some of which was blacked out in a public copy posted online. It said that the UK requires companies handling private data to enact sufficient measures to protect it, which it found Sony had failed to do.

The document says the payment is due by 14 February, with a 20 percent discount to £200,000 if the payment is received in full by 13 February. It also grants Sony the right to appeal its ruling.

The ICO said it has the power to levy fines of up to £500,000 for such offenses.

The investigation found that while Sony did take measures to protect its users' data, it did not keep its online security measures up to date. It also noted that despite the severity of the breach, the personal data is "unlikely to have been used for fraudulent purposes" and said it had "no complaints received to date."

In an interview posted to the ICO website, David Smith, deputy commissioner and director of Data Protection, said the large fine was in line with Sony's security lapses.

"We make no apologies for the penalty in this case. It's a big penalty, its a quarter of a million pounds, but this is probably the most serious breach that we've had reported to us," he said.